In Australia, cutting methane can cost less than buying credits

In Australia, cutting methane can cost less than buying credits.

The Institute for Energy Economics and Financial Analysis (IEEFA), in its September 2026 report Not so hard to abate, cites International Energy Agency analysis showing that 97% of oil and gas methane emissions could be cut for under US$20 per tonne of CO2e, about A$28.

Over the same period, Australian Carbon Credit Units (ACCUs) averaged A$38 per tonne in the second quarter of 2026.

When abatement is cheaper than the credit

The comparison is simple. If a tonne of methane can be abated in the oil and gas value chain for less than A$28, and a tonne of credits costs around A$38 on the market, the cheaper tonne is the one cut at source.

That changes the budget conversation. Credits are often treated as the default way to close the gap between a company's emissions and its targets. Where abatement inside the value chain costs less than the credit, the default no longer holds, and the case for funding reductions directly gets stronger.

Where the reductions sit

Methane from oil and gas operations is a supplier-side problem for many buyers. It sits upstream, in the production, processing and transport of the fuels and feedstocks they buy, and in their Scope 3 footprint.

Reductions of this kind are often well understood technically: finding and fixing leaks, replacing venting equipment and reducing flaring. What is often missing is a funding model and a way for the buyer to show what its money achieved.

Co-funding and recording the reduction

Buyers can co-fund methane reductions at their suppliers, have them measured and independently verified, and hold one serialized record of each verified tonne as an inset credit on Carbon3. The record links the reduction to the supplier and the project that delivered it, so it can be traced and is not counted twice.

That gives the buyer something different from a credit purchased elsewhere: a verified reduction inside its own value chain, often at a lower cost per tonne.

Insetting is not offsetting. The reduction is made within the buyer's own supply chain, rather than paying for a tonne cut somewhere unrelated.

Claim treatment depends on the applicable reporting framework.

Source: IEEFA, Not so hard to abate (September 2026).